It looks like the SEC has been on a fraud-fighting spree lately, going after not only SBF but also the Discord community “Atlas Trading.”
Eight people were charged with a $114 million meme stock pump-and-dump scheme, including finance influencers @MrZackMorris and @Ultra_Calls who used social media platforms like Discord and Twitter to promote their illegal activities.
Finance influencers frequently combine unofficial trading advice with flashy displays of success on social media. These eight influencers may have thought they were slick, posting pictures of their fancy cars and bling on social media, but they were caught red-handed making grandiose claims about their investments only to secretly sell off the stock once their followers drove up the price.
In the end, they made a cool $114 million in profit before the stocks they promoted tanked, and now they could be facing possible jail time.
The Takeaway: It seems like every celebrity and their mother is trying to sell you some sort of investment on Instagram or TikTok. But they can't just say anything – and some learned their words can have real consequences.
Even Kim Kardashian and Floyd Merriweather have gotten in on the action, getting caught up in their own pump-and-dump scandals this year. So next time you're scrolling through Instagram and see a celebrity pushing a “can't-miss” investment, remember: sometimes influencers can give even worse advice than Jim Cramer.